Offering insights into the financial markets as well as discussion involving the world of the Robo Advisor.

Rebalance Versus Reoptimization

Everyone uses the word rebalance.  I am done with it.  Re-optimization fully dominates rebalancing. Let’s define a rebalancing action as a portfolio reallocation process where an investor  recenters a portfolio back to its target allocation.  The theory here in that one avoids chasing the hot assets and helps to systematically buy low and sell high. …

Optimal IPC Targets

I am often asked what value should I target in the IPC’s.  Is a value of 60% really better than a value of 50%?  Here is my latest thinking;  Reducing the amount of systemic exposure is indeed critical to reducing the risk experience of a portfolio. there seems to be an exponential utility decay function…